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New policy on crop boards right step
2006-05-10 08:27:52
By Editor
Since independence, some 45 years past, a series of policy experiments have been tried out on agriculture. In early 1970s, peasants were congregated together into so called Ujamaa villages mimicking China’s model of land ownership.
Records show that in some areas, food crop productivity increased tremendously. Yet, in other places, villagilisation programme resulted into unprecedented social and economic miseries.
The nationalization of cash crop plantations in mid 1970s brought yet another disaster. Gross mismanagement and financial abuses brought productivity down to zero, as history can testify in the case of sisal and coffee plantations.
In the wake of these policy experiments, the supportive role of democratic co-operative societies and unions was undermined and actually replaced by ham-fisted crop authorities.
One of the strategic reform agenda from early 1980s when open-door policies started to be seen as alternatives was to revive cooperative movements and introduce private crop buyers to compete with primary societies.
Complaints abound about peasants getting short-changed by private buyers. In turn private crop buyers routinely accuse local authorities for charging them unlimited number of ’nuisance taxes’.
The litany of structural impediments to farm productivity is long, because even crop boards deduct a percentage fee from sales to finance their overheads.
It seems the fourth phase government has realized the policy weaknesses hitherto wrecking havoc to the sector, practically the lifeline of the economy.
A U-turn in fiscal policies related to agriculture is expected to take place from next budget. The aim is superior: To ensure that the farm gate price which a farmer obtains on the market place is lucrative enough to entice them to increase productivity.
A draft of new policy guidelines shows that noxious elements like crop cess, various crop development funds and board fees would be scrapped from next financial year. The government will shoulder the task of running crop boards and crop purchase license would be issues once and for all. No annual renewal fees.
The responsibility of the crop boards will then become strictly regulatory; to ensure that rules and regulations in place guiding fair play crop marketing are adhered to the letter.
Meanwhile, the amount of budgeted subsidies to agricultural inputs will be augmented with a view of enabling more farmers practise modern crop and animal husbandries.
This short-term direction is correct. Over the longer run, however, strategies for minimizing rain-fed agriculture and the use of hoes need to be worked out properly. When the land laws become friendlier to bankers, access to liquid capital and farm technology would be greatly enhanced.
The only sure strategy for invigorating domestic effective demand is to let farmers’ incomes rise over time. The spillover effects would boost manufacturing and the service sectors of the economy. That way, income poverty will be solved.
However, we need a starting point. The marks are already on.
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